Audit 396562

Criteria or Specific Requirement: Per Uniform Guidance § 200.430(g), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed." This includes a requirement that records are "supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated." Condition: One employee's pay rate used was not updated to reflect the increased board-approved rate for the 2024-2025 school year. Questioned Costs: $88 – known questioned costs. Likely questioned costs are not included as they are under $25,000 Context: Identified two out of 40 samples selected in which the incorrect pay rate was used to calculate the employee's gross wages for the pay period. Both underpayments were related to the same employee, and therefore determined to be isolated. Cause: Upon Board approval of annual salary schedules, the HRIS System Specialist loads the approved schedules into the B+ payroll system. A secondary review is then performed by HR to verify that affected employee pay assignments align with the approved rates prior to the first payroll of the fiscal year (July 1). The underpayment resulted from an isolated human error in which the secondary verification step was not completed for this employee prior to the July 1, 2024, payroll. This occurred during a period of operational disruption within the HR department, including temporary remote operations, limited system access, and leadership transition. Director of Human Resources reviewed all other program-paid employees to verify no others were affected by the same human error during the affected pay period. CLA's testing deemed to be sufficient corroboration, as CLA tested every program-paid employee, except for one (92%), for at least one pay period. This breakdown was not representative of standard practice. Effect: Incorrect payments paid to employees, which results in noncompliance with Uniform Guidance standards for documentation of personnel expenses. Repeat Finding: No Recommendation: CLA recommends implementing a stronger system of review for ensuring all changes in employee payroll are properly implemented and approved. Views of Responsible Officials: There is no disagreement with the audit finding.